Tag Archives: social computing

Sometimes I get the feeling that Charlene Li is on a crusade — a crusade to prove with hard data that social media can have real value for business. First there was Groundswell, co-authored with Josh Bernoff, which highlighted an array of companies leveraging social media successfully to achieve business objectives. Now there’s a new study from Charlene’s company, Altimeter Group, and Wetpaint, that shows a correlation between social media engagement and financial performance.

The ENGAGEMENTdb Report looks at the top 100 performing global brands according to the BusinessWeek/Interbrand “Best Global Brands 2008” ranking and measures and ranks their engagement in a range of social media channels for both depth and breadth. The analysis shows a clear correlation between social media engagement and financial performance.

While correlation is not the same thing as cause and effect, the data is impressive. And as Mark Pack points out in a blog post, if one assumes that the world’s top performing companies are run by the world’s most capable managers, it’s noteworthy that these business leaders appear to endorse a deep and committed engagement in social media.

The report concludes with a useful assessment of the best practices of four of the most socially engaged brands — Starbucks, Toyota, SAP and Dell. It’s interesting that the way companies engage in the space can vary greatly. For example, while Starbucks only permits a small group of designated employees to speak for the company in social channels, SAP has 1500 employee bloggers.

There are a few details missing from the report that I would like to have seen. Each company was rated on 40 engagement attributes, but the report doesn’t provide the specific attributes. What’s more, while it lists the specific social media channels analyzed, there is no analysis of which, or in what depth, each company engaged with the individual channels. This might have helped to better understand while Apple, a company that doesn’t receive particularly high marks from me for online social engagement, made it to the top third of the ranking.

So, what will be the next station in Charlene Li’s crusade to prove the business value of social media? I wouldn’t be surprised if she’s already working on the next quantitative study, the one that show not only a correlation, but an actual cause-and-effect relationship between social media engagement and business results.

This talk by Jeff Jarvis on the future of marketing and advertising was made at the recent Brite Conference at Columbia Business School. It’s well worth the 21 minute investment to watch it.

Jarvis’s central thought is that advertising is failure. It’s merely an inadequate replacement for what should be an ongoing exchange between the people running companies and the people that buy those companies’ products and services. In an online world where new social media technologies are enabling these direct conversations to happen, Jarvis asks a fundamental question: Will advertising, as “middleman,” still have a role to play?

I think it will, and Jarvis at the end of his talk essentially acknowledges that it will. But it does make you imagine that what will serve brands better in future is less what we think of as advertising, and more about simply spreading the word to people who care. It will depend upon connected consumers to pass messages along, which in turn will place a greater premium than in the past on messages that are engaging and entertaining through great stories, or interactivity, or elements of gaming, or who knows what. And encouraging consumers to mash-up and modify the content in order to give it their personal spin.

I think there will continue to be a role for advertising, but its role will change, and with it, the nature of advertising itself.

The May 11th, 2009, issue of The New Yorker features an article by Malcolm Gladwell entitled “How David Beats Goliath. When underdogs break the rules.” Gladwell reviews principles by which the weaker of two competitors, who under normal circumstances would surely suffer defeat, can shift the odds to come out the winner.

One of the key principles will be familiar to anyone who has read Adam Morgan’s marketing classic, Eating the Big Fish: How Challenger Brands Can Compete Against Brand Leaders. Morgan says that in order to succeed, small-share challenger brands, as he calls them, have to change the rules of the game — for example by breaking the conventions of the category.

A great case study of a challenger brand (although I’m not sure it’s mentioned in Eating the Big Fish) is Felix Cat Food. Originally the number 4 or 5 cat food brand in the UK, Felix advanced up the ranks to challenge the market leader Whiskas with an unconventional, consumer relevant creative approach and by using newspapers as its primary medium, rather than TV. TV was where most of the other cat food brands were putting their money.

In The New Yorker article, Malcolm Gladwell’s signature case for this principle is the story of David and Goliath. Gladwell writes:

In the Biblical story of David and Goliath, David initially put on a coat of mail and a brass helmet and girded himself with a sword: he prepared to wage a conventional battle of swords against Goliath. But then he stopped. “I cannot walk in these, for I am unused to it,” he said … and picked up those five smooth stones.

When the David’s of this world choose to play by different rules than the Goliath’s, more often than not, they win.

Another great example that Gladwell writes about in some detail is the story of a girls’ junior high basketball team, whose players were neither especially tall, nor especially gifted, but who nevertheless made it to the national championships. They did it by utilizing a strategy that is basketball’s equivalent of David reaching for the five smooth stones. It’s called the full-court press. Many basketball teams practice the full-court press a few minutes at a time, but the Redwood City girl’s basketball team pursued it relentlessly.

There is a convention to playing basketball that most teams follow. When Team A makes a basket, they immediately run back to their own end of the court to await the approach of Team B, who now has possession of the ball. As Gladwell explains, this convention favors good teams:

Good teams, after all, had players who were tall and could dribble and shoot well; they could crisply execute their carefully prepared plays in their opponent’s end. Why, then, did weak teams play in a way that made it easy for good teams to do the very things that made them so good?

The coach of the Redwood City’s team — who, by the way, had never played basketball or coached a basketball team before, and therefore had no preconceived notions of the game’s conventions — took a different approach. He coached his girls to exercise the full-court press constantly. Rather than retreating to their own side of the court after they scored a point, they aggressively challenged the opposing team for the possession of the ball on that team’s side. Instead of standing behind the single opposing player she was assigned to shadow, to impede her if she received a pass, each Redwood City girl maneuvered herself in front of her opponent, to prevent her from even receiving the pass in the first place.

Often this meant the opponents would lose possession because they would fail to advance the ball across the mid-court within 10 seconds, a rule of the game. This helped the Redwood City players to regain possession close to their opponents’ basket, which meant they could score more often with an easy lay-up, rather than going for lower percentage, long range shots, which demanded greater skill.

They also aggressively tried to block the inbounds pass, which is when the opposing team throws an out-of-bounds ball back into play. Most teams don’t bother with this, but the Redwood City girls did. This often forced the opposing team either to exceed the five second limit for getting the ball back into play (and lose possession) or, panicking, to simply throw the ball away. In general, the opposing players simply lost their groove against the Redwood City team’s tactics. Flustered and frustrated, they couldn’t take advantage of the strengths that normally made them so powerful.

So what does this have to do with social media?

As I read Gladwell’s article, I began to see interesting parallels between advantages of the full-court press strategy for the Redwood City underdogs and the use of social media for a challenger brand.

First of all, social media is not the conventional choice most big brands will use for communicating with consumers. They aren’t comfortable with it and continue to focus their efforts, and their budgets, on the standard TV, radio and print media they already know. But just as Felix replaced TV with newspaper, which was the unconventional medium for the time and the category, a dedicated commitment to social media and the power it has to forge brand-consumer relationships can be a potent strategy for stealing share from the big guys.

Another point Gladwell makes about the full-court press is that it takes much more physical effort than the conventional way of playing the game:

It is easier to retreat and compose yourself after every score than swarm about, arms flailing. We tell ourselves that skill is the precious resource and effort is the commodity. It’s the other way around. Effort can trump ability … because relentless effort is in fact something rarer than the ability to engage in some finely tuned act of motor coordination.

In other words, it’s easier to create and produce a flashy 30″ TV commercial and stick the thing on air, than to be out there in the social media space day in and day out, talking like a human being with individual consumers, engaging with your brand enthusiasts and building your brand’s reputation one consumer at a time. As my friend Joseph Jaffe says: in the world of new media, “Marketing isn’t a campaign, it’s a commitment.”

And finally, consider this quote from the Gladwell article:

Redwood City attacked the inbounds pass, the point in a game where a great team is as vulnerable as a weak one.

Putting a positive spin on it, the inbounds pass is the point in a game where the weak team is as powerful as the strong team. The same can be said for social media. It doesn’t require a mega-budget for a brand to put together an effective social media effort. Unlike conventional broadcast media, the playing field in the online social media arena is fairly even, whether you’re the market leader or a smaller challenger brand. Social media is the place where great ideas can catch on and spread without big budgets, thanks to the connections people have within their communities and their passion to pass on content they love.

So to all you small players out there in the marketing world — think like David and the Redwood City girls basket ball team. Consider how social media can help you shift the rules of the game to your advantage, and slay big old Goliath.

About a month ago, Forrester Research released a new report, authored by Jeremiah Owyang, on the future of the social web.

The other day, Jeremiah, inspired by a trip he made to the Netherlands, put out a call to the international social media community to translate his abstract of the study into foreign languages. You can find the original English here, and my translation into German below.